Environment Committee on June 6th, 2024

[The Chair, Liberal, Francis Scarpaleggia]

Thank you.

Ms. Pauzé, the floor is yours for two and a half minutes.

[Monique Pauzé, Bloc, Repentigny, QC]

Thank you, Mr. Chair.

Ms. Pierce, going back to Shell Canada's Quest project that I mentioned earlier, five megatonnes of carbon were captured as part of that project, but 7.5 megatonnes were produced during the same time period. I'd like the people watching us to know that $777 million of the total $1 billion cost invested in that project came from public funding.

Now I'd like to discuss the Institute for Energy Economics and Financial Analysis. According to that institute, 10 of the 13 carbon capture and storage projects currently under way are underperforming or have simply failed.

Ms. Pierce, how can capturing one megatonne of carbon per year be of any help to an industry that, according to recorded data for 2022, produces slightly more than 158 megatonnes in that same period of time?

[Susannah Pierce]

Thank you for the question.

As you may recall, the Quest CCS project began back in the 2010s. It was a pilot project and it was advancing the technology, so as a result, it was a project from which we were learning. It was a project on which we had to work with government in order to make it feasible, partly because of the financial framework and partly because the business models didn't exist.

As a result of that project, however, we now have captured nine million tonnes, and that is significant because that's nine million tonnes that would otherwise have been emitted. In fact, I believe the project has worked and a lot of the information—

[Monique Pauzé, Bloc, Repentigny, QC]

I'm going to stop you for a moment. You say you've captured carbon, and you're right. However, in September 2022, the institute that I named earlier announced that 73% of captured CO2 had been sold for enhanced oil recovery purposes.

In short, the Quest project did in fact make it possible to capture more carbon, but it was then used solely to extract more oil.

So how does that help fight climate change?

[Susannah Pierce]

Thank you for the question.

The project was really looking at how we could reduce emissions from the manufacturing of oil, oil that is still in demand unfortunately as a part of the overall economy. Eighty per cent of the world today still depends on fossil fuels, so we can't shut down the existing energy system. What we can do is use projects like CCS to decarbonize the fuels we use today. That is what projects like Quest and other CCS projects are about.

[The Chair, Liberal, Francis Scarpaleggia]

Thank you.

Ms. Collins, please go ahead.

[Laurel Collins, NDP, Victoria, BC]

Thank you, Mr. Chair.

I want to start off by just going back to something Mr. Kruger said around the taxes that your companies pay. This is from Canadians for Tax Fairness. They note that:

From 2021-2023, the oil and gas industry recorded $132.0 billion in pre-tax profits, second only to the real estate industry among non-financial industries. Among the 10 most profitable industries during this period, [the oil and gas sector] paid the lowest effective tax rate, 8.0%. This is because the oil and gas industry makes disproportionate use of tax credits and capital cost allowances. The industry received over $20 billion in tax credits from 2010 to 2021.

It is unfortunate that our current government continues to give out huge fossil fuel subsidies, huge tax breaks, to an industry that is raking in record profits and paying an incredibly low tax rate.

I also want to talk about the lobbying that is happening. There is a clear analysis that the oil and gas emissions cap proposal is already set so low that it is easily achievable if your companies simply follow through on the voluntary climate promises you have already made.

It's pretty concerning to learn that you have been actively lobbying to undermine it, and you've also been actively lobbying against an excess profits tax on the oil and gas industry, and effectively, because we've learned through The Globe and Mail, that the finance minister was considering this and then backed down in the face of lobbying from your industry.

I'm curious as to why you consistently try to lobby against the policies you say you're potentially in support of because you want to get to net zero.

Maybe we'll start with Mr. Kruger and then we can go to Imperial with Mr. Corson.

[The Chair, Liberal, Francis Scarpaleggia]

Mr. Kruger, go ahead.

[Rich Kruger]

Sure. There was a lot for a first date in that question or statement, or I'm not exactly sure what it all was, but I'll take it piece by piece. You referenced industry taxes and profits. I can't relate to those, but I can look at what my company has paid. As I said, in the last four years, we've made $17 billion, and we've paid $17 billion in taxes and royalties.

[Laurel Collins, NDP, Victoria, BC]

The question was about lobbying and the emissions cap.

[The Chair, Liberal, Francis Scarpaleggia]

Unfortunately, there's no time for the answer.

Mrs. Goodridge.

[Laila Goodridge, Conservative, Fort McMurray—Cold Lake, AB]

Thank you, Mr. Chair.

It's interesting as I sit here and reflect that my dad worked for 42 years in the oil industry in Fort McMurray. He very proudly put on steel-toed boots every single day as a tradesperson to go and secure Canada's energy future. He was very proud of that and his time at Syncrude. I'm sure he would be beside himself if he could be here today to watch this and to see me at this table questioning the executives.

To start with, my questions are for Mr. Kruger.

What is the difference in emissions per barrel at the Suncor base plant, which is the oldest operation in the oil sands, versus Fort Hills, the newest?

[Rich Kruger]

They're materially lower at Fort Hills.

I don't have the exact numbers for the two different facilities, but in terms of the technology applied to develop Fort Hills, the average barrel that is produced at Fort Hills is essentially the same as the average barrel in North America. It's materially lower. New technology, much more recent—

[Laila Goodridge, Conservative, Fort McMurray—Cold Lake, AB]

Thank you.

I have very little time. Could you table that with the committee, please?

My next question is for Mr. Corson.

There's an active pilot project that's happening at the Cold Lake operation, which is in the southern part of my riding, and it's employing the enhanced bitumen recovery technology. What emissions reduction does this project represent?

[Brad Corson]

Thanks for the question.

We have multiple pilots we're pursuing. The enhanced bitumen recovery technology has the potential to reduce emissions intensity by approximately 60%. As I mentioned earlier, we've recently started up a new operation at Cold Lake called Grand Rapids that we expect to deliver a 40% reduction.

Technology plays a very key role in our path to net zero by 2050.

[Laila Goodridge, Conservative, Fort McMurray—Cold Lake, AB]

I have another question. I'm sorry to go all over the place, but we have very little time.

Mr. McKenzie, recently your company announced a very large amount of money—$50 million—to help nearby indigenous communities tackle their very serious housing crisis. Was this part of a regulatory requirement or any kind of government requirement?

[Jon McKenzie]

The short answer to your question is that this was done of our own volition. I would like to take credit for that, but it was actually my predecessor, Alex Pourbaix, who started that program. We are delivering on an immediate need to aboriginal communities where we do business by building 200 homes over the next five years for that $50 million that you spoke of. We're very proud of that.

[Laila Goodridge, Conservative, Fort McMurray—Cold Lake, AB]

I can go one further. It's beyond just building homes. You're actually—and this is something that I'm very proud of—also helping indigenous students get the skills they need at Portage College, which is also in the southern part of my riding and located primarily in Lac La Biche.

This goes to show a piece of the fact that doesn't get talked about here. I know most of the members around this table have gone on diatribes explaining to you guys as a way of undressing you in some form rather than actually asking questions.... I'm very happy we had the opportunity to have this, because these are important questions that Canadians deserve to have the answers to.

For my next question, I'll go to Mr. Kruger. What is your annual spend with indigenous business each year?

[Rich Kruger]

Last year, we spent, as a total company, on the order of $15 billion or $16 billion. Twenty-three per cent went to indigenous companies—more than $3 billion.

[Laila Goodridge, Conservative, Fort McMurray—Cold Lake, AB]

Is that part of a government or regulatory requirement?

[Rich Kruger]

No, we do that because we think it's good business.

[Laila Goodridge, Conservative, Fort McMurray—Cold Lake, AB]

For Mr. Corson, I have the same question.

[Brad Corson]

Yes, we take a lot of pride in our relationship with the indigenous partners we have across our businesses. We've been growing that part of those relationships since 2008. We have spent a cumulative $4.6 billion with our indigenous partners.

[Laila Goodridge, Conservative, Fort McMurray—Cold Lake, AB]

I have the same question for Mr. McKenzie.

[Jon McKenzie]

We too believe in investing in the communities where we do business. I believe that since 2019 we've spent about $1.4 billion with aboriginal businesses, and since 2009 about $4.5 billion.